Expert’s Guide: How to reduce subscription churn
Getting new subscribers is on every sales team's agenda. While acquisition efforts matter, retention ensures business growth. But with retention comes subscriber churn.
All subscription brands face customer churn–it’s inevitable. We’d be lying if we said that you could eliminate it; however, you can actively work to reduce your churn rate and avoid severe impacts on revenue.
Let’s dive deeper into best practices to identify, prevent, and reduce subscription churn.
Preventing & minimizing voluntary churn
U.S. companies lose up to $136.8 billion annually to voluntary churn. With the recent consumer reevaluation of subscriptions, businesses are focusing more on branding, experiences, and omnichannel approaches to strengthen loyalty and boost retention.
Give good subscribers better reasons to stay
More than transactional relationships, subscribers seek personalized offerings that fulfill their rational and emotional needs. Customers cancel because they’re unsatisfied with a product, have found a better alternative, or think businesses don’t care about their experience.
When the experience with your product or service is just as robust as your offering, customers will hesitate to hit the cancel button. Analyze subscriber behavior, and make their needs your own:
Tailor your service according to each customer’s demands–whether its convenience, pricing, or reliability.
Include value-added features like exclusive content or premium access to make your product more attractive.
Offer a pausing option that gives subscribers the freedom to return to your service whenever needed.
Great companies are successful beyond their products. Leverage all your touchpoints and communication channels to deliver value and engage with your subscribers.
Optimizing your processes
Speaking of subscription experiences, making your onboarding, renewal, and off-boarding processes effortless for subscribers is critical.
Early subscriber churn is common when customers feel unsure about how to use your product. Ensure easy access to tutorials that help customers navigate your product and a dedicated customer success team to answer their questions as clearly and quickly as possible.
Complex renewal or cancelation journeys could lead to negative word-of-mouth from customers. Allow subscribers to end their service with a few clicks. Voluntary churned subscribers are the perfect feedback opportunity to understand your audience and better tailor your experience.
Recommended reading:How to identify zombie segments - who’s at risk of churning
Preventing & minimizing involuntary churn
With more than 2,000 types of credit card declines, failed transactions are the main cause of involuntary churn. Recurring billing platforms like Recurly automate revenue recovery to collect all payments. Here’s how we can help you address failed transactions before and after they occur:
Anticipating payment declines
13% of all recurring transactions are likely to fail. While there isn’t much you can do about insufficient funds, there are ways to minimize loss due to avoidable failed payments.
Account Updater: Foresee and avoid payment declines by monitoring and automatically updating any changes in Mastercard, Visa, Discover, and American Express credit cards. Learn more.
Gateway Failover: This functionality helps you auto-detect gateway outages or downtime, route transactions to a backup gateway, and automatically revert to the primary gateway when the issue has been resolved. Learn more.
Recovering failed payments
Managing recurring payments is complex, especially when dealing with different billing cycles at once. Subscription management keeps you on top of past-due invoices to never miss a payment.
Dunning Campaigns: Our dunning management lets you create customized communication emails to collect payments due and encourage subscribers to update their card information. Learn more.
Intelligent Retries: When a recurring credit card payment is declined, our machine learning capabilities allow you to schedule a transaction retry attempt when it is more likely to succeed. Learn more.
At the end of the day, the goal is to maximize revenue through anticipation and recovery. This two-way approach makes it easy for businesses to reduce subscription churn.
Burn the churn. Keep a good thing growing.
The shopping experience has evolved through the years – going from physical to digital stores, from single purchases to recurring models. Today, you can subscribe to nearly everything, making subscription commerce a competitive industry for businesses to thrive.
Leading brands rely on Recurly to reduce involuntary churn to 1%. Schedule a demo today to see how we can help you keep revenue growing.